Russia’s Trans-Siberian Railway

08-Aug-2013

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An eternal optimist, Liu-Yue built two social enterprises to help make the world a better place. Liu-Yue co-founded Oxstones Investment Club a searchable content platform and business tools for knowledge sharing and financial education. Oxstones.com also provides investors with direct access to U.S. commercial real estate opportunities and other alternative investments. In addition, Liu-Yue also co-founded Cute Brands a cause-oriented character brand management and brand licensing company that creates social awareness on global issues and societal challenges through character creations. Prior to his entrepreneurial endeavors, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group where he worked with senior management on multiple bank-wide risk management projects. He also had a dual role as a commercial banker advising UHNWIs and family offices on investments, credit, and banking needs while focused on residential CRE, infrastructure development, and affordable housing projects. Prior to M&T, he held a number of positions in Latin American equities and bonds investment groups at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities at Steinberg Priest Capital Management (family office). Liu-Yue has an MBA specializing in investment management and strategy from Georgetown University and a Bachelor of Science in Finance and Marketing from Stern School of Business at NYU. He also completed graduate studies in international management at the University of Oxford, Trinity College.

Rail-based transport between Asia and Europe is considerably cheaper than seaborne transit, and Russia’s infrastructure investments could relieve economic pressure on European and Asian countries that are struggling to maintain current trade levels. The Trans-Siberian Railway, for example, is capable of moving some 120 million tons of cargo each year, and around 13 percent of container trade between Europe and Asia utilizes the line. A recently approved $17 billion expansion of the 9,300-kilometer (roughly 5,800-mile) railway would add another 55 million tons of capacity by 2018 — a 46 percent increase.

The railway expansion will be accompanied by several other infrastructure projects. According to Russian railway and port operator N-Trans, Russia will triple rail-to-port capacity in its Pacific coast terminals by 2020. In addition, the port at St. Petersburg is expanding by 44 percent, and German engineering giant Siemens signed a $3.2 billion deal in 2012 to supply 675 cargo electric locomotives to Russia.

Moscow has two goals in the railway expansion. First, it hopes to boost its exports of raw commodities. Russia has become among the top oil producers and exporters in the world, and around 250,000 barrels of Russian oil is transported to Asia by rail each day — an amount that could increase with the Trans-Siberian expansion. The coal industry too would rely on an expanded Trans-Siberian Railway for exports to Asia. The upgraded railway would also give Russia a more prominent role in trade between Europe and Asia. Currently, goods from Asia can reach Europe in roughly 10 days via the Trans-Siberian Railway. By comparison, seaborne goods from South Korea or Japan, for example, take around 28 days to reach Germany and 40 days to arrive in St. Petersburg. Moscow hopes the rail expansion will make overland transit through Russia even more attractive as an alternative to seaborne routes.